Economic Liberalization and the Structural Power of Business

Abstract

This chapter focuses on private capital’s structural power, the indirect mode of influence that business enjoys in the policy process as a result of the key economic role it plays in capitalist democracies. Specifically, the chapter traces the evolution of business’s structural power in the era of economic liberalization in India and empirically demonstrates the marked rise in capital’s structural power at both the national and subnational levels since 1991. It also finds that business’s structural power is not constant but varies across states in India. Though capital’s structural power has clearly risen in India in the era of economic liberalization, the chapter suggests that business influence is not hegemonic; the chapter identifies four factors—the importance of noneconomic factors in electoral politics, the internal heterogeneity of capital, the continuing role of the public sector, and patterns of patronage and cronyism—that mitigate business’s structural influence.